Sri Lanka should target remittances to the tune of 15% of Gross Domestic Product (GDP), according to the country's Central Bank Governor Ajith Nivard Cabraal, who further elaborated that a current plan targetted remittances equalling 7.4% of GDP by 2013. He also added this would necessitate workers not just having “cheap skills” but, rather, a more professional workforce.
He also stated that Foreign Direct Investment (FDI) into the country would increase by 5% of GDP going towards 2013. Noting there was $6 billion in infrastructure projects currently in progress, Mr. Cabraal further suggested Sri Lanka's private sector to be the beneficiary of these projects; adding that the Colombo port South Harbour Expansion Project, where US$ 1.5 billion in private funding was slated for terminal development, was a case in point. He also identified the commencement of five exploration wells by 2011 by the local subsidiary of oil driller Cairn and the simultaneous development of 14 domestic airports and one international airport as other examples.
All this was attributable to "policy consistency" to a degree never witnessed before in the country, according to Mr. Cabraal.
Speaking at the inaugural session of the 31st National Conference of the Institute of Chartered Accountants in Colombo last week, Mr. Cabraal also revealed that some foreign exchange controls would ease within the next two weeks or so. He also noted poverty alleviation figures for Sri Lanka, due in 2011, would have "substantially gone down" compared to 15% in 2007 and 22% in 2002.
Mr. Cabraal also alluded to the country's "agricultural renaissance," saying food security was a "must" so that the country would not "fall into any traps." He also added that the rubber and rubber products and the fruits and vegetables industries would be worth US$ 1 billion and US$ 0.75 billion respectively by 2015.
Also speaking at the event was Arjuna Mahendran, a former Board of Investment of Sri Lanka chief who is currently Managing Director of Singapore-based HSBC Private Bank who noted that corporates were better at investment promotion than governments. As such, he revealed that investments such as the Prima flour mill, Pugoda textile mill, South Asia textiles, the World Trade Centre, Havelock Residencies, Dialog Telecom, Apollo Hospitals and the HSBC BPO centre were all brought in by corporates.
He also suggested that, to attract more FDI, the country needed to focus more on internal transportation infrastructure in areas such as toll highways, commercial airports, ferries and water taxis. He also noted that agriculture, power generation and IT could potentially show an upward momentum, and advised on the need to synchronise education policy with private sector requirements as well as highlighting the need for private universities.
He further stated that the country's next step, after setting up export processing zones, should have been industry clusters, tax holidays, cash subsidies, worker housing, water availability and boards of investment in each province. And that there was also a need for "specialist focus" in investment promotion such as those who provided oil distribution services; fleet maintenance, flying schools, in flight services in the aviation industry; affordable housing and other service providers for the proposed healthcare and IT/BPO corridors in Narahenpita and Malabe/Rajagiriya; and the need to freeing up economically viable acreage for agro industries and water for the apparel and other industries. |
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